FOB Legal Meaning and Definition

Here is a simplified definition of the legal term FOB.

FOB (abbreviation): An acronym for 'Free On Board'. This is a legal term referring to a specific point in a sales contract where the seller is no longer responsible for the cost and risk associated with the goods for sale. In a FOB agreement, the seller's obligation ends when the goods are loaded onto the transport vehicle. Any insurance costs and incidental costs after this point are the buyer's responsibility.